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In Q4 2020 MicroStrategy acquired about 32,220 Bitcoins at a gross purchase price of $700.0M with an average price of $21,726 per Bitcoin.
MicroStrategy Inc (NASDAQ: MSTR) announced its financial results for the final Q4 of the 2020 fiscal year on Thursday. MSTR stock jumped 10% in the pre-market to trade at $635.01.
The Virginia-based company is the largest independent publicly-traded enterprise intelligence firm. With the aim to “make every enterprise an intelligent enterprise”, MicroStrategy provides business intelligence applications and cloud-based services. Many businesses had to make changes during pandemic-ravaged 2020 and MicroStrategy is no exception.
MicroStrategy CEO Michael Saylor said this in the report:
“2020 was a transformational year for MicroStrategy. In our enterprise intelligence business, we continue to embrace the virtual wave. We are successfully shifting our prospects and customers to our enterprise cloud platform, and also launched our new SaaS offering, Hyper.now. We also dramatically improved the efficiency and profitability of our business.”
MicroStrategy 2020 Q4 Overview
Total revenue for the period from October 1 to December 31, 2020, was $131.3M, a 1.7% decrease when compared to total revenue for the same period in 2019. Revenues from product licenses and subscription services amounted to $38.6M, a 3.3% increase when compared to the same period in 2019.
Product support revenues were $71.9M, a 3.8% decrease when compared to the same period in 2019. Other services brought in $20.9M, a 2.8% decrease when compared to the same period in 2019
Gross profit for the period from October 1, 2020, to December 31, 2020, was $110.5M, a gross margin of 84.2%, compared to a gross margin of 81.6% in the same period in 2019.
Operating expenses for Q4 of 2020 were $110.1M, an 11.0% increase compared to the same period in 2019. Income from operations for Q4 of 2020 amounted to $0.4M while income from operations for the same period in 2019 was $9.6M
Net income for Q4 of 2020 was $2.7 million, or $0.27 per share on a diluted basis, as compared to net income of $12.2 million, or $1.18 per share on a diluted basis, for the same period of 2019.
MicroStrategy ended Q4 2020 with cash, cash equivalents and short-term investments of $59.7M, a decrease of $506.0M from $565.6 on December 31, 2019.
The carrying value of MicroStrategy’s digital assets at the end of Q4 2020, made up exclusively of Bitcoin, was $1.054B, which indicates cumulative impairment charges of $70.7 million since acquisition.
MicroStrategy’s Future with Bitcoin
In Q4 2020 MicroStrategy acquired about 32,220 Bitcoins at a gross purchase price of $700.0M with an average price of $21,726 per Bitcoin. The company has bought a further 314 bitcoins at a gross purchase price of $10.0 million for an average purchase price of $31,808 per Bitcoin.
The company has this to say on the acquisition of the digital asset:
“Regarding our bitcoin strategy, our pioneering decision to make bitcoin our primary treasury reserve asset has made MicroStrategy a thought leader in the cryptocurrency market and generated great interest in MicroStrategy as a corporation. Going forward, we continue to plan to hold our bitcoin and invest additional excess cash flows in bitcoin. Additionally, we will explore various approaches to acquire additional bitcoin as part of our overall corporate strategy.”
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